Targeted communication from providers key to AE awareness
Pension providers need to look for more innovative ways to improve engagement with their employees, according to Aegon.
This comes after the Office for National Statistics' (ONS) ONS Wealth and Assets Survey - released this week - found a fifth of UK workers are unaware of auto-enrolment (AE) into a workplace pension scheme.
Aegon pensions director Steven Cameron said: "The latest ONS figures show one third of employees aged 22-24 are unaware of their employer's obligation to enrol them in a workplace scheme.
"Saving for retirement is not often front of mind for young workers as many will be dealing with immediate priorities such as paying off student debt and saving for a house deposit."
All eligible employees over the age of 22 earning over £10,000 per year are automatically enrolled into a pension scheme, with a minimum total contribution of 8% going towards their future savings.
Aegon surmised that a 22-year-old auto-enrolled on the minimum wage could currently build a pension pot worth £106,900 by the time they reach state pension age.
Cameron adds that "getting people properly engaged much earlier" is key to building AE awareness and encouraging savings, with providers particularly in a position to do more.
"Regular targeted communications and the acceleration of digital communication…are just some examples of how companies can adapt to the challenges face in the current climate," he said.
"There is no silver bullet, but pension providers and employers should look for innovative ways to improvement engagement with their employees."
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